Understand and calculate your Zakat

The Zakat al-maal, one of the pillars of Islam (along with the Shahada, the prayer, the Hajj and the fasting of Ramadan), is a tax on savings. It represents an unalienable right of the poor upon the rich. Every Muslim is liable to Zakat, and must pay tax if their savings exceed a certain threshold called Nisab, which is indexed to the price of gold, or that of silver.

1. Determine the Nisab

In one lunar year, the date will be Tuesday 04 December 2018

The Nisab represents the monetary value of 85 grams of gold (or 595 grams of silver for the Hanafite school of thought).The Zakat is based on the amount of savings over a lunar year, and not a solar year. It is therefore necessary to use the Hijri (or Muslim) calendar, and not the Gregorian (Christian) calendar.

Some Muslims choose to use the month of Ramadan as a start date, but in reality, the Zakat must be paid when your savings have been exceeding the Nisab for an whole lunar year.

The Nisab for the date selected is the amount shown in the yellow box above.

If the full amount of your savings exceeds or is equal to the Nisab over the course of a lunar year, you must pay the Zakat al-maal. If this amount becomes smaller than the Nisab, you do not have to pay the Zakat al-maal until your savings have been equal or greater than the Nisab for a whole lunar year.

2. Calculate the Zakat

To honour the Zakat al-maal, it is necessary to perform another calculation, just as simple as the one above. All you have to do is multiply the amount of your savings by 0.025 (or 2.5%). Here is an example: I have saved 4,000 dollars over the course of a lunar year. The amount of Zakat I must pay is therefore of: 4,000 * 0.025 = 100 dollars. An even easier way to calculate the Zakat is to divide the amount saved by 40.

Amount of your assets (press Enter):

Payable Zakat:

To put it simply, to honour the Zakat al-maal is to pay a fortieth of one’s assets over an entire lunar year.

Zakat al-maal (زكاة المال)

The Zakat al-maal, or alms tax, is an annual tax on assets/goods and wealth (cash, precious metals, savings books, bank deposits, banking assets, crops and cattle, fees, bonuses, gratuities, inheritances and other revenues such as the lease of properties).
Land property, real-estate (if the properties aren’t being sold), home furniture, items of clothing, cars, mortgages and personal jewellery belonging to women are exempted from the Zakat al-maal.

Time Period

The Zakat becomes due on the total value of assets if the aforementioned value stays above the Nisab (النصاب), or taxation threshold, for an entire lunar year. Therefore, the start date of the period is not fixed.
For the assets/goods to be subjected to the Zakat, two conditions must be met :

Threshold (Nisab النصاب): The value of one’s assets/goods must reach this threshold.

Period: The value of one’s assets/goods must not go under the threshold during an entire lunar year (Hijri calendar).

Examples

Let’s imagine that the threshold currently established by the Nisab (النصاب) is 2500 dollars.

1st example:

On the first day, you possess 3,200 dollars. After a whole lunar year, you own 4,000 dollars. Over the entire time period, the value of your assets hasn’t gone under the threshold established by the Nisab.
After an entire lunar year, you must pay the following Zakat: 4,000 * 2.5 = 100 dollars

2nd example:

On the first day, you own 3,200 dollars. After a whole lunar year, you possess 4,000 dollars. During the eighth month of the year, the value of your assets falls to reach 2,200 dollars, while the Nisab is at 2,500 dollars. After ten months, the sum saved once again reaches the threshold.
At the end of the year, you must pay a Zakat of : 0 dollar
It is then necessary to start calculating again from the date (here, the tenth month) on which the value of your assets has reached the threshold established by the Nisab.